Leases and Rental Agreements
Understand what to expect from the tenancy agreement when renting property in Thailand...
A foreigner renting property in Thailand is usually required to present the following documents:
- A copy of work permit (if applicable) or Certificate of Residence issued by Thai Immigration or Letter of residence from the person's Embassy certified and translated into Thai
- Proof of income (pay slips, bank deposits) must be provided if the landlord asks for them
Although these are the typical documents required, in practice many landlords will rent property without them.
The lease is a contract between the landlord and the tenant. This contract protects both parties involved as it details the terms of the agreement made regarding the property.
Generally, rental agreements last for one year. However the retail period times can vary from a "short time stay" (usually three months) to a "long time stay" (one year).
Within the lease, the following should be clearly defined:
- The monthly rental fee
- How long the lease is valid
- What happens if either party terminates the lease agreement
- All other terms and conditions
It is advisable to have a signed an inventory listing all furnishing, fixtures, condition of rooms for example.
The rent on the property cannot be raised during the duration of the lease agreement; however it is open for negotiation when the lease agreement ends.
Securing the contract
Generally a lease and security deposit are all that is needed to secure property in Thailand; it is not typical to give a LOI or a good faith deposit to secure property. (A Letter of Intent is a written offer that expresses a mutual interest in renting the property and states the proposed rent, duration, move-in date and any work necessary to complete the proposed transaction. A good faith deposit is paid to the owner to secure the LOI to prevent a potential lease to another party.)
Although not a common practice for renting property in Thailand, the landlord may want the tenant to provide a guarantor who will be named in the leasing agreement and will co-sign that document.
In most cases the tenant will need to pay a two-month deposit along with the first month's rent. It is not unusual for a Thai landlord to request a three-month deposit.
At the end of the lease the deposit is refundable. The landlord will take an inventory and deduct any expenses incurred in repair or replacing damaged items. Assuming that the property and furnishings are in good condition, the deposit should be returned.
The tenancy obligations vary with the type of property that is rented. For example, many of the apartment complexes do not require tenants to pay for water, trash removal and cable television. When renting a house, the tenant typically pays all costs associated with the running and maintenance of the house.
Basic tenant obligations include:
- Paying the agreed rent on the agreed due date
- Paying for water and electricity usage
- Ensuring that the property is not damaged
- Only having the specified number of people living there
- Give sufficient notice when terminating the lease agreement
Note: It is not legal for a foreigner to use his property for commercial purposes.
Subleasing/subletting by tenants is generally not allowed. Owners will state in the agreement that subleasing is not allowed. (A sublease is when the tenant leases out the property to a third party who usually pays more than the original rent to the tenant. The tenant makes a profit after paying the owner.)
Terminating a Tenancy
The Tenant: Generally, if it is necessary for the tenant to leave prior to the agreed date they will forfeit their deposit. If it is stated in the lease agreement that the tenant can terminate their contract with sufficient notice (usually a 60-day notice is specified) then they will be able to collect their deposit.
The Landlord: The landlord cannot legally terminate the contract unless the tenant has broken a specific rule that was mentioned in the agreement. For example, if the tenant does not pay rent by the due date or if they use the house for illegal activities.
There is no requirement for the landlord to give notice of eviction to the tenant after the lease agreement has expired.
It is extremely important for a tenant to have a solid rental contract otherwise they may become vulnerable. Keep all rental receipts, agreements and receipts for all major household purchases as proof of payment. Those without sufficient proof that they have paid all rents, could be made to pay the rent again.